Bought Your Rental Years Ago? You Can Still Claim Every Missed Deduction

David Wiener: Every deduction you didn't take on your rental property last year is gone. That's what most investors believe. It's why people shrug and say, Well, too late now and go back to work. It's wrong. Not a little wrong. There's a four-page IRS form filed right alongside your normal tax return that goes back and hands you every dollar of depreciation you should have taken since the day you put that building into service. Not three years of it. All of it, on one return, and you don't amend a single old return to get it. Most investors have never heard of this form, and I'll tell you something else about it before we're done, which is that a lot of tax professionals would rather you never bring it up. Welcome back to the Tax Strategy Playbook. I'm David Wiener. Some of you know me as Mr. Cashflow. I've spent my career helping real estate investors, business owners, and the tax professionals who serve them keep more of what they legally earn, on purpose, with a plan instead of a shrug. Today's a solo show. Just me, one topic, and one form. Back in episode 20, I spent time on a myth I hear more than almost any other. I bought the property years ago, so I missed my window. I told you that window doesn't close, and that there's a thing called a look back study, and that you should say those two words out loud to your tax professional. A lot of you did. And then a lot of you came back with the same follow-up. Okay, but how does that actually work? What does my accountant have to file? Why don't I have to amend my old returns? That sounds too good to be true. Fair question. All three parts of it. So today I'm walking you through the machinery. The form is called Form 3115, and by the end of this episode, you're going to know exactly what it does, and exactly why the IRS lets you do this, exactly how to tell whether the property you own right now is worth doing it on, and exactly what to say to get it moving. This one's built for three people. The investor who's owned rentals for years and has never had a cost segregation study on any of them, the business owner who bought the building the company operates out of and has been depreciating it the boring way ever since. And the tax professionals listening who got clients in exactly that spot and want the plain English version to hand them. I'll say up front this is the most mechanical episode I've ever done. There's a form in it, and there's a code section, and there are numbers. And I'm not going to skip past any of that because the whole reason this deduction goes unclaimed is that nobody explains the plumbing. But I promise you I'm going to explain the plumbing, and I'll do it in English. Quick heads up before we get rolling. Stay with me into the back half because I'm going to put real numbers on a real property. A duplex bought in 2022, held four years, no study ever done, and I'll show you the exact size of the check that's been sitting there the whole time. Then I'll run the same duplex bought in 2024 instead, and then a commercial building, so you can see how much the answer moves. And near the end, I'm going to tell you the single most common reason this deduction never gets claimed. It's not what you'd guess. And it has nothing to do with you. If you only catch the first 15 minutes, you'll understand the idea and miss the part that tells you whether it applies to you. So don't miss it. Let me lay the foundation because everything after it depends on this. When you own a rental property, the tax code lets you write off a slice of the building's cost every year. The theory is that buildings wear out. In practice, your building is probably worth more than you paid for it, but the deduction is there anyway, on purpose, because Congress wants private money going into real estate. For a residential rental, You spread that write off over 27 and a half years. For a commercial building or a short-term rental, where the average guest stay is less than seven days or less, think vacation rental, it's 39 years. Same amount, every year, a slow drip. Two things come out before you start. Land comes out. Land never depreciates. Not ever. Not under any strategy. Not with a study and not without a study. So somebody has to split your purchase price between the dirt and the structure sitting on it. And most of the time that's done off the county tax assessor's ratio because the assessor already values land and improvements separately, and it's a method that holds up. And appraisal works too. What doesn't work is guessing. What's left is your cost basis, purchase price minus land, plus every capital improvement you've put in since. New roof. New HVAC, the addition you built in 2023, those get added on. Basis isn't a number frozen at closing. It moves as you put money into the building. And I'll flag one thing there because it catches people. Not everything you spend on a building goes into basis. Fixing a broken window is a repair, and you deduct it the year you pay for it. Replacing every window in the building is an improvement, and it goes into the basis and it gets depreciated. The line between those two has its own body of rules, and your tax professional is the one who draws it. What matters for our purposes is that the improvement side of that line is sitting in your basis right now and it counts. That number is the one that matters, and if you don't know yours, that's your homework this week. I'll come back to it. Now, here's what the slow drip method quietly ignores. Your building isn't really one object, it's a roof. And carpets and cabinets and countertops and a parking lot and fencing and landscaping and the wiring feeding one particular appliance in one particular wall. None of that lasts 27 and a half years. Nobody's carpet does. Nobody's parking lot does. And engineering-based cost segregation is what fixes that. A trained professional comes to the property in person, photographs it, and engineers go through the photos, the plans, and the cost documentation. And move those components into the recovery periods they actually belong in. Five years, seven years, fifteen years, instead of leaving them buried inside a 27 and a half year building where they really don't belong. And once a component sits in one of those shorter buckets, bonus depreciation reaches it, which is what lets you take a big share of that value in a single year instead of a trickle over decades. So here's the picture I want in your head. You bought a property some years back. Your tax professional put it on a standard schedule, which is precisely what a competent tax professional does with the information they were handed. Every year since, you've taken the slow drip number instead of the number the study would have produced. And the gap between those two added up every year you've owned it is real money that has never appeared on any return that you've ever filed. So what happens to that gap? That's where almost everybody guesses wrong and it's where we're going next. The instinct is to amend. You missed deductions in twenty two, twenty three, twenty-four, so you go back, fix those three returns, collect three refunds. That's what most people assume, and I hear it constantly. That instinct is wrong. And why it's wrong is the single most useful idea in this episode. The tax code draws a hard line between a mistake and a method. A mistake is a one time error. You transpose two digits. You left an invoice out of the pile. You fix a mistake by amending the return it showed up on, and you've got roughly three years to do it. A method is a different animal. If you've depreciated a property the same way for two consecutive years or more, the IRS doesn't see a string of errors. It sees your accounting method. You've picked a way of doing it, you did it consistently, and now that's how you do it. Depreciating your building on the straight 27 and a half year line is a perfectly permissible method. It's just not the most advantageous one available to you. And you don't amend your way out of a method. You change it. Now stay with me here because this next part sounds backward the first time you hear it. Amending is limited three years back roughly, then the door shuts and whatever's behind it stays behind it. Changing a method isn't limited in that way at all. When you change your depreciation method, the IRS doesn't ask you to open old returns. It asks you to calculate the whole difference between what you did take and what you should have taken across the entire life of that property and then put that number on your current return. One line, one year, everything. That calculation has a name. It's a section 481A adjustment. If that phrase means nothing to you, don't worry about it. It's the catch-up number, and the number is the point. I want to be precise about the two-year piece because the IRS is precise about it. This isn't my rule of thumb. Publication 946 says you adopt a method of accounting for depreciation by using a permissible method when you file your first return, or by using the same impermissible method in two or more consecutively filed returns. Two returns, that's the line. The myth, just amend your last three years. You'll see this one on social media, and I've watched tax content creators say it out loud on camera. Do a cost seg amend your last three returns, collect three refunds. Two problems with that. First, if you've owned the property longer than three years, that approach walks away from everything older than the window. Own a building since 2016. Amend back to 2023, and you've just left seven years of ketchup on the table that you were entitled to. Nobody tells you that part. Second, and this matters more, once a method is established, you generally aren't permitted to amend it away. It isn't that amending is the worst option, it's that it's often the wrong procedure entirely, and a return filed the wrong way is a problem you now own. There's one narrow exception, and I'd rather you hear it from me than get surprised by it. If you place the property in service only in the year immediately before this one, you haven't used the method for two consecutive years yet, so there's no established method to change. In that case, your tax professional may well handle it by amending instead, and they'd be right too. That's the one situation where the amendment instinct is correct. Everybody else, and that's most of you, wouldn't Is looking at a method change. So let's talk about what a method change actually is. Let's take a quick break before I show you the form itself. If this is the kind of thing you'd rather have land in your inbox than have to remember to come back for, go to taxstrategyplaybook.comslash newsletter and subscribe. It's free and it'll give you access to both my tax 2020. It's free. And it gives you access to both my 2026 tax planning guide as well as the playbook notes for every episode at no charge. And when you sign up, reply to me with one word, basis. If you don't know your cost basis on the property you're thinking about right now, that word tells me where to start with you, and it tells you what your first phone call this week needs to be about. Okay, the form. Form 3115 is the application for change in accounting method. That's its whole job. It's the document you file when you want to stop doing something one permissible way and start doing it a better permissible way. Six things about it are worth knowing. None of them require you to be an accountant. One. This particular change is automatic. There's a numbered list of accounting method changes the IRS has pre-approved, published every year, and a change in depreciation method or recovery period is right on it. Automatic means no user fee. It means you're not waiting on anybody at the IRS to say yes. Your tax professional files and you proceed. Two, it rides right along with your regular return. This isn't a separate proceeding or a special filing season. The original Form 3115 attaches to your timely filed return, extensions included, for the year you make the change. A signed duplicate copy goes to the IRS. That's it. Three, the catch up hits all at once. When the adjustment runs in your favor, and on a cost segregation look back, it essentially always does. The adjustment period is one year, not spread over four, the full number on that year's return. Four. And this is the big one. There's no statutory limit on how far back this calculation reaches. It goes to the year the property was placed in service, however long ago that was. The three-year clock that govers amended returns simply doesn't apply here because you aren't amending anything. This is the piece that surprises most people, and it's why I keep telling you the window doesn't close. Number five, your old returns don't get touched. They were correct when you filed them, they stay filed. Nothing gets reopened, nothing gets restated, and nobody goes digging through twenty nineteen. Six, you aren't asking permission, you're notifying. That's the real difference in posture and it's worth understanding if the whole thing feels sort of presumptuous to you. The IRS built this procedure specifically so taxpayers could correct depreciation going forward without calling. Clogging the system with amended returns. You're using it in exactly the way it was intended to be used. Let me put some more weight on that word automatic because people hear it and assume it means casual. It doesn't. Automatic means the IRS has already decided in advance and in writing that this category of change is one that it will consent to. Every year the IRS publishes an updated list of these pre approved changes, and a change from an impermissible depreciation method to a permissible one has been on that list for a long time. Your tax professional finds the right section, cites it on the form, follows the conditions attached to it, and consent is granted by the act of filing correctly. So when I say you're not waiting on anybody, I mean it literally. There's no letter that comes back. There's no approval that shows up in the mail six months later. You file and the change is made. And I want to be clear about what you are and aren't claiming here, because the language around this gets loose online. You're not claiming a deduction you were never entitled to. You're claiming a deduction you were always entitled to on a schedule you should have been on from the beginning, using a procedure the government wrote for exactly this situation. The distinction matters to me and it should matter to you as well. The myth is filing a thirty one fifteen paints a target on you. I get this one in person more than online. Somebody leans in and says, isn't filing an extra form basically asking for an audit? No. Form thirty one fifteen is completely routine. Businesses file it to switch from cash to accrual accounting, to fix inventory treatment, to comply with new rules Congress passes. Thousands go in every year for reasons that have nothing to do with real estate. It's paperwork, not a confession. What draws real scrutiny isn't the form. It's a weak study sitting behind the form. If the number on that line came out of an online calculator or off a percentage rule of thumb somebody applied without ever setting foot on the property, then you're holding a number you can't defend. If it came from an engineering based study with an in-person site visit, photographs, plan review, and a component level documentation, You're holding a number that absolutely will stand up. I went deep on exactly what that documentation looks like in episode 24, where I walked through the IRS's own cost segregation audit techniques guide. If this episode has you thinking about pulling the trigger, that one's a companion piece. The risk was never the strategy. The risk was always the shortcut version of the strategy. Which brings me to the part that nobody actually talks about. I told you at the top that I'd give you the most common reason this deduction never gets claimed, and that has nothing to do with you. Here it is. Form 3115 is a pain to fill out, and most tax professionals do not enjoy doing it. I want to be careful how I say that because tax professionals are a big part of my audience and a bigger part of my business. And this is not in any way a knock on them. It's a knock on the form. Here's the situation from their side of the desk. Form 3115 isn't conceptually hard, but it's long. It's fiddly, and it asks for the change number and legal basis and a full description of the pres present treatment and the proposed method and the computation behind the adjustment. And a lot of preparers see it maybe twice a year. It's the kind of form where you spend 45 minutes reacquainting yourself with the instructions before you fill in the first box. And it lands on their desk in March or in early October, which is exactly when there is no 45 minutes to spare. So what happens is not that anybody says no, what happens is that it becomes next year's problem. And that next year is March again. I've watched this play out plenty of times. The client asks, the tax professional says that's a good idea, and 18 months later nothing has been filed. Nobody did anything wrong. The form just never made it to the top of the pile. So we take it off the pile. When CSSI looks when CSSI runs a look back study, the deliverable isn't just the engineering report. It can include A draft of the completed Form 3115 filled out with the change number in place, the method descriptions written, and the section 481 of a computation already carried through and tied to the study. It can go to your tax professional if they want it to, as a working draft, along with a documentation that supports every number on it. Their job at that point is to review it, apply their own judgment to it. and sign it, which is exactly the job they should be doing and not the job of retyping a computation somebody already ran. And to be clear about the division of labor there, the tax professional is still the professional. They're the ones who are deciding whether the change is right for you, whether it fits with everything else on your return, and whether they're comfortable putting their name on it. That's their call and it should be. What's changed is that they're making their call over a completed draft instead of over a blank form and a study report they'd have to translate first. I've had tax professionals tell me that this is the difference between a client request they dread and one they'll happily take. Same strategy, same client, same money on the table. The only thing that moved was who did the form. I'm telling you this for a practical reason, not to sell you anything. If you go to your tax professional and ask about a look back study, And you hear some version of, let's look at that after the deadline. That hesitation is usually about the paperwork. And the paperwork is the part that can be already handled. Say that out loud, and the conversation tends to move. Now let's figure out whether your property is even worth having that conversation about. Not every property is a candidate. I'd rather tell you that now than have you call me and find out later. So here are the three things that decide it. One, the year you bought is locked in. Almost nobody knows this one, and it's the biggest single variable in the whole calculation. Bonus depreciation is the piece that lets you take those reclassified components right away instead of over five or seven or fifteen years. But the bonus percentage hasn't been the same every year, and it's moved a lot recently. Here's the rule. The rate you get is the rate that's applied when the property was placed in service, not the rate today. Doing the study in 2026 doesn't hand you 2026's rate on a building you bought in 2023. The clock on that property stopped the day it went into service, and the look back honors whatever the rate was then. So the shape of it going backwards, property placed in service from 2017 through 2022 was at 100%. 2023 dropped to 80, 2024 dropped to 60%. And 2025 is where it gets interesting because 2025 has two answers in it. The One Big Beautiful Bill Act signed in July of 2025 brought 100% bonus depreciation back permanently. But it drew the line at January 19th of 2025. And the test is stricter than most people realize. To get the full 100% bonus, The property has to be both acquired and placed in service after January 19th, 2025. Both, not one or the other. Which means if you signed a binding contract on a building in September of 2024 and closed and placed it in service in March of 2025, you don't get 100%. You acquired it under the old rules. That property sits at 40%. That's a detail that's tripped up people who do this for a living, and it's worth knowing before you build an expectation. For every year before 2025, it's simply the year the property was placed in service that sets your rate. What all of this means practically is that a 2021 purchase and a 2024 purchase, same building, same study, produce very different catch up numbers. The 2021 buyer reclassifies a dollar and writes off the whole dollar. The 2024 buyer writes off 60 cents of it that year and depreciates the rest over the shorter lives. Neither one's bad. Neither one is bad at all. They're just not the same. And you should know which one you are before you get your hopes up. Two is how long you've owned it. Back in episode 20, I told you that we can generally go back about 15 years and still make a cost segregation study worth doing. That's not a legal deadline, and I want to explain where it comes from because the reason behind it is more useful than the rule. The property a study moves into shorter buckets is five, seven, and fifteen years property. If you've owned a building for 18 or 20 years, that property has already finished depreciating under the regular schedule. It got there slowly instead of all at once, but it got there. There's no gap left to catch up because you already took it. Just one year at a time, the long way. So the 15 year figure isn't the IRS closing the door on you, it's arithmetic. Past a certain point there's simply nothing left in the shorter buckets to accelerate, and the study really stops paying for itself. That cuts the other way too, and this is the part I want you to hear. If you bought it in the last handful of years and you've been telling yourself it's too late, you aren't anywhere near the edge. You're right in the middle of the window. Third, whether you actually can use the deduction is very important. This is the one that decides whether the ketchup is cash in your pocket this year or a number that sits and waits for you. A catch up deduction on rental property is a deduction inside that rental activity, which means it runs into the same passive activity rules as other rental loss. Changing your accounting method doesn't change what kind of income this activity produces. If real estate is a side investment for you and not your job, the tax code generally won't let you use a large rental loss against your salary or your business income right away. It gets suspended and carries forward, waiting for you to have other rental income or to sell the property. That's not nothing. A suspended loss isn't a loss loss. It sits on your return and it carries forward indefinitely. And it comes off the top when you eventually have passive income to absorb it, or when you sell the property. Plenty of investors do this deliberately, knowing the deduction parks for a few years, because they'd rather have it banked and waiting than never take it at all. But it's very different from a refund this April, and anybody who tells you otherwise is skipping the part that matters most to your bank account. When somebody posts online about the enormous first year savings they got from a cost segregation study, And doesn't mention how they qualified, this is the detail they left out. Not maliciously, usually. It just doesn't occur to people that their situation isn't the same as everybody else's situation. The two common ways to use it right away are the same two I've covered before. Qualifying as a real estate professional in the eyes of the IRS, which broadly means real estate is your main job, more than half your working hours and at least 750 hours in a year. Or the short short term rental rule term rental rules where the average stay is under seven days and you're the one hands-on running it. Episode four is the full conversation on that with Gabriel Verdaru. And if you don't know which side of that line you're standing on, go to listen to it before you spend a dollar on a study. Or talk to me first, and I'll help guide you. I'll say that one more way because it's the most expensive mistake available in this whole episode. Knowing whether you can use the deduction matters more than knowing how big it is. Okay, enough theory. Let me put some numbers on it. One ask before I run the numbers, and this one isn't about you. Think of a specific person, an investor with a couple of rentals, or a business owner which happens to own the building his company sits in, who's been quietly assuming their window closed years ago. Every year they keep assuming it costs them real money. Send them this episode by name. Not sometime, do it today. Let me build one property and run it three ways so you can see this instead of just hearing about it. Everything that follows is an illustration I put together to show the mechanics. It's not a client and your numbers will be your own. Scenario one is the duplex bought in 2022. A duplex bought in June of 2022 for $600,000. The county assessor puts the land at $120,000, which leaves $480,000 as the depreciable cost basis. That clears the $150,000 threshold I gave you in episode 20 without breaking a sweat. Residential rental, so $27,5 years. $480,000 divided by $27.5 is about $17,450 a year. The owners held it through 22, 23, 24, and 25. Counting a partial first year, they've taken somewhere around $61,800 of depreciation in total. Correct on every return. There's nothing wrong with any of it. Now they come to me and have us do a study in 2026. It finds 25% of the building qualifies as five, seven, and fifteen year property. On a $480,000 basis that's $120,000 of components, flooring, cabinets, appliances, the driveway, the fencing, specialized wiring, and I'm being very conservative at 25%. Studies frequently find a good bit more than that. Here's the pivot. That property was placed in service in 2022, and 2022 was a 100% bonus year, so the correct treatment. The one this owner was always entitled to was to write off the entire $120,000 in year one and depreciate the remaining $360,000 shell over 27 and a half years. Add that up across four years and the correct total comes to about $166,400. They took $61,800. So run the subtraction with me because this is the whole episode in one line of arithmetic. $166,400, which is what they should have taken, minus $61,800, which is what they did take. The difference, the catch up, is roughly $104,500 on one return. In 2026. Not spread out, not amortized, not three refunds from three amended returns. One number on this year's return covering four years of deductions that never happened. For an owner who can use it in the top bracket, that's somewhere near $38,700 of actual tax benefit. For a passive investor, it suspends and waits, which is exactly why I put that section ahead of this section. Let's look at scenario two. The same duplex bought in 2024. Same price, same land split, same study, same 25%, only the year changes. 2024 was a 60% bonus year. So instead of writing off the full 120,000 up front, this owner writes off $72,000 of it and depreciates the remaining 48,000 across the five, seven, and 15-year lives. Fewer years of holding, smarter acceleration. Their catch-up lands somewhere around $79,000 instead of 104.5. And I'll tell you plainly that the exact figure there depends on the mix of 5, 7, and 15-year property in the study. So let's treat that as a close approximation rather than a precise number. Notice what did and didn't change between those two scenarios. The building didn't change, the study didn't change. The 25% didn't change. What changed was two years on the calendar and a percentage that Congress set. That's it. And nobody at the closing table in June of 2024 mentioned it because it wasn't relevant yet. It's relevant now. Both are large, both are worth doing, but the same building and the same study produce a $25,000 swing on nothing but the year of purchase. That's what I mean when I say the year you bought is locked in. Here's a third scenario, the commercial building. For the business owners listening, because this is not just a landlord strategy and I don't want you tuning out. Say you own the building your company operates out of. You bought it in 2021 for $1.2 million. Land comes out at $200,000, leaving a million dollars of depreciable basis. Commercial, so 39 years, which is an even slower drip than residential. About $25,600 per year. Five years in, you've taken roughly $120,000 of depreciation. A study on a building like that will often find more than twenty five percent because commercial buildings carry more specialized electrical, more dedicated plumbing, more site work, more parking, but hold it at twenty-five to stay consistent. That's two hundred and fifty thousand dollars of components, and twenty twenty-one was a one hundred percent bonus year. Your catch up runs somewhere north of two hundred thousand dollars. on one return. And here's the part that makes commercial the commercial case different from the rental case. If you're actively running the business that occupies that building, you are generally not a passive investor in it. Which means the answer to the third qualifier, can you use it, is much more likely to be yes for you than the landlord in scenario one. Confirm that with your own tax professional because your facts are your facts. But that's a materially different conversation, and business owners tend to not realize they're having it. I'm not going to hand you a $200,000 number and skip the bill attached to it. Everything you attach Everything you accelerate into those shorter buckets comes back differently when you sell. The building shell recaptures at a rate capped at around 25%. The components a study carves out recapture as ordinary income, which can run to 37%. I did a full episode on that, episode 17, the recapture trap, and I'd rather you listen to it before you do this than after. The short version is that it's usually a good trade. And it gets better if you hold long-term, exchange it into another property, or pass it on to your heirs. But it is a trade, not a gift. Know the exit before you take the deduction. Let me run the questions I actually get asked out loud. Short answers, no hedging. Does my property have to be a rental? No. A building your own business operates out of counts. So does a short-term rental, so does commercial, so does industrial. What if I've already done a cost segregation study on it? Then this isn't for that property. You're already on the right method. This is for the ones you haven't done a study on. What if I've sold the property? Then the moment's passed for that one. This works on property you still own, which is a decent argument for having the conversation before you list. Does it work on property I inherited? Your basis is different. And it's usually a stepped-up basis as of the date of death, which changes the math, but it doesn't close the door. Have your tax professional pull the basis first. What does the study cost? I like to tell clients that that's kind of like asking, what does a car cost? It's generally around a few thousand dollars, sometimes more, be because it depends on the size, the location, and the complexity of the study. And you should never have to guess at that number. because you can get it quoted before you commit to anything. Will this delay my return? Well the answer is it shouldn't. The form goes with the return. What you don't want is to start the process the first week of October and expect it filed by the 15th. Give it a little room. Can I do this on multiple properties at once? Yes, and plenty of people regularly do. Each property gets its own analysis. If you own six buildings and none of them have been studied, You're not looking at one conversation, you're looking at six. What if my property's in an LLC or a partnership? That's fine, that's most of them. The change gets made at the entity level and the catch-up flows through to the partners on their K1s the way any other item does. Whether each individual partner can use it still depends on the own partner's situation, which is worth saying out loud if you've got partners who assume they're all in the same boat. They very well may not be. What if I only own part of the building? Well, then you're working with your share of the basis. Same mechanics, smaller number. Do I need the original closing documents? It helps enormously, and you should go find them. The settlement statement, the purchase agreement, any construction invoices if you built or renovated, if they're truly gone, there are ways to reconstruct the basis, but reconstructing it is slower and less precise than reading. Start with the file cabinet. Is there a deadline on any of this? Not on the look back itself, which is the whole point of this episode. The deadline that does exist is the filing deadline for whatever year you decide to make the change in. Miss that and you're not out of luck. You're just doing it a different year later against a different year's income. Okay, let's make this something you can act on. Here's your playbook. Five steps And you can get through the first four this week. Step one find your cost basis on every property you own. Purchase price, minus land value, plus improvements. It's on your last tax return, or whoever prepared that return has it. If it clears $150,000 on a single property, that property is worth running numbers on. And if you hit a wall on this one, call me. Basis trips up more people than any other step here. Especially when there have been improvements over the years or the land allocation was never done cleanly. I'll walk you through it and help you find it. It costs nothing. It takes about 10 minutes. Step two: write down the month and year each property was purchased and the month and year each property was placed in service. I need both dates, and they're often not the same date. The day you closed, The day the property actually went into service. If you closed in November and it sat empty until you finished the rehab and got a tenant in March, those are two different dates and both of them matter. The purchase date can drive your bonus rate under the 2025 rules, and the placed in service date drives everything else. Step three: find out whether you can use the deduction before you buy the study. Call your tax professional and ask this exact question. Given my situation, If I generated a large depreciation loss on the property this year, would it offset my other income or would it be suspended? If the answer is suspended, that's not a no, but it changes the math, and you deserve to know before you spend money instead of after. You can also get a free estimate from me and take that to your tax professional, show them what the tax benefit would be before you ask that question, and they'll be more intelligently able to answer your question. Step four, ask about the look back by name, and now you can ask about the form too. Say this. Would an engineering based cost segregation study make sense on this property? And if so, would we file a form 3115 to catch up the current year? That sentence tells whoever you're talking to that you know what you're asking for. Specific questions get specific answers instead of a shrug. You can also ask them If it would be helpful if the cost segregation study provided them a draft Form 3115. That may make a difference. Step five: if you get a yes on the first four, get an estimate before you commit to anything. Not a guess. An actual estimate of what the study costs, what the catch-up would be, what the tax benefit would be. Contact me and I can provide one for you in a matter of days. The last step is the one I can help you with directly. I work with CSSI, the oldest and largest engineering-based cost segregation firm in the country. I'll run a no-cost analysis on any property you own or looking at buying. No obligation, no sales pitch. You give me a few pieces of information, and I can tell you within days what the study would cost and what the estimated benefit looks like. And here's the part I want you to hold me to. If the numbers don't work on your property, I'll tell you that. I'd rather give you a straight no on one building and talk to you again in three years about the next one that sell you a study that doesn't pay for itself. You can book that conversation at Calendly.com slash David Dash Wiener slash CS. The link is in the show notes so you don't have to write it down. Or you can call me directly at 770-224-8504-252. Extension two. Nothing in this episode is tax advice for your situation. Your facts are your facts, and they need a professional who knows them. What I can do is make sure you walk into that conversation knowing exactly what to ask for. Remember, tax evasion is a crime, but tax avoidance is mandatory. The window on this one doesn't close. But every year you wait is another year of deductions that you funded the government with instead of yourself. I'm David Wiener, Mr. Cashflow. See you next Tuesday on the Tax Strategy Playbook.